the dti/UNIDO Competitiveness Conference The productivity triad approach and the role of institutions in competitiveness Professor Michael Best, Centre for Industrial Competitiveness, University of Massachusetts 7 June, 2004
4. Figure 3. Evolution of Japanese Industrial Structure
Knowledge-intensive industries (computers, instruments, heavy
machinery) 100% 100% Unskilled-labour-intensive industries 100%
Medium capital and labour-intensive industries (light machinery,
motor cars) 100% Medium capital and raw-material intensive
industries (Steel, plastics, fibres) Source: Japan Economic Survey,
Economic Planning Agency, 1974-5: cited in Magaziner and Hout, 1980
p.7 Best The New Competition p170 Japan (1959) Japan (1974) Japan
(1985) West Germany (1974) M. Best, NCA
5. Table 2. Five Models of Technology Management Case Armory
Ford Toyota Canon Intel Production Principle Inter- changability
Flow Flow Flow Systems Integration Application Specialization
Single Product Multiple Products New product development Technology
integration Generic Capabilities Product engineering
Synchronization Kaizen Product development Design rules TM1 TM2 TM3
TM4 TM5 Performance Breakthrough Standardization Cost Cost, Quality
Time Cycle time Innovation
6. Table 3. Technology Management & Business Organization
Business Model Traditional enterprise Big Business Kaisha Kaisha
Multi- enterprise Industrial Organization Open system Market /
vertical integration Networks - closed Networks - closed Networks:
open Model of Innovation Specialist machine R&D labs Kaisen
Evolutionary Disruptive TM1 Armory TM2 Ford TM3 Toyota TM4 Canon
TM5 Intel Generic Production Capability Machine tool integration
Throughput efficiency Continuous improvement Mechatronics Open
systems: 5Ds M. Best, NCA
7. Table 2. Production Capabilities Spectrum -part one M. Best,
NCA Pre-flow, pre-interchangeability: Craft production, by itself,
offers no basis for flow. Each drawer is custom fit. The task is to
develop product-engineering skills. Jamaica and Honduras.
Interchangeability ( PS 1 ): product engineering without process
engineering, hence low inventory turns and working capital
productivity. Cyprus and Slovenia in the 1980s. Single product flow
( PS 2 ): plants with economies of speed for a single product or
range of products with dedicated lines. Workers are not
multi-skilled and attend to a single machine. Training does not
include continuous improvement, rapid changeover, or blueprint
reading skills. Multi-national corporation (MNC) electronics
production in Indonesia. Single product flow with continuous
improvement ( PS 3 ): involves problem solving work self-directed
work teams. Common training programs include Plan-Do-Check-Act
diffused by the Japanese Union of Scientists and Engineers, the 7
problem-solving tools of TQM (total quality management) at shop
floor level. Single product flow with process innovation ( PS 3 ):
personnel include maintenance and process control technicians with
skills to identify, fix and redesign machinery and production
lines. Bottleneck analysis determines priorities. This may involve
reconfiguring product design parameters at main office as required
by DFM (design for manufacturability). Singapore in the mid-1980s,
Malaysia MNCs in early 1990s. 1. 2. 3. 4. 5.
8. Table 2. Production Capabilities Spectrum -part two M. Best,
NCA Multi-product flow ( PS 3 ): the Toyota system. Kanban, JIT
(just in time), and SMED (single minute exchange of dies) are
introduced in large plants. High throughput and flexibility are
combined. Cellular production with self-directed work teams.
Multi-product flow and product development (PS 4): Japan and Taiwan
both excel at concurrent engineering and design for
manufacturability. Skills include reverse engineering, prototype
development, and pilot runs. New product design and technology
fusion (PS 4): Japans Toshiba and Canon are leaders in linking
development to operations at the plant level and linking research
in generic technologies to product development. Core technologies
are developed, often via fusion in generic technology labs.
Technology management involves world-wide sourcing of the existing
technology base in pursuit of novel applications. Systems
integration and disruptive innovation (PS 5): 3 M, HP and Motorola
use cross-disciplinary teams to identify new technology drivers for
product development. Disruptive or breakthrough innovations are
pursued but within an organizational context of process integration
and HPWSs (high performance work systems). Hardware and software
integration drives product concept development. Open systems and
design modularization (PS 5): standard inter-face rules and
diffusion of design capability support focus and network
strategies. Fosters technology deepening R&D and
techno-diversification 6. 7. 8. 9. 10.
9. Table 3. Technology Management and Production Capabilities
Spectrum 1. Pre-flow, pre-interchangeability TM1 2.
Interchangeability TM2 3. Single product flow TM3 4. Single product
flow with continuous improvement 5. Single product flow with
process innovation 6. Multi-product flow TM4 7. Multi-product flow
and product development 8. New product design and technology fusion
TM5 9. Systems integration and disruptive innovation 10. Open
systems and design modularization M. Best, NCA
master engineering and work team interfaces for continuous
improvement
Source: New Competitive Advantage
11. Figure 5. TM4 : Fast-Cycle Development and Technology -
Pull Source: Adapted from Terao Yamanouchi. A New Study of
Technology Management, Asian Productivity Center, 1995 Generational
technology improvement Time Fast-cycle competitor Slow-cycle
competitor 1 2 3 4 2 3 4 5 6
12. Figure 1. Competing Business Models The Old Vertical
Computer Industry - Circa 1980 The New Horizontal Computer Industry
- Circa 1995 Source: Adaptation from Only the Paranoid Survive by
Andrew Grove, 1996. Used by permission of Doubleday, a division of
Random House, Inc. Sales and distribution Application software
Operating systems Computer Chips Sperry Univac Wang Retail Stores
Superstores Dealers Mail Order Word Word Perfect Lotus DOS and
Windows OS/2 Mac UNIX Compaq Dell IBM Etc Packard Bell HP Intel
Architecture Motorola RISC Sales and distribution Application
software Operating systems Computer Chips Disk drives Printers IBM
DEC I-net SAP Linux Seagate Quantum Western Digital Maxtor
Selectron SCI Flextronics Jabil Celestica HP Epson CMs M. Best,
NCA
13. Figure 3.1 Model of Cluster Dynamics Industrial District
specialization and speciation dynamics New Firms technological
diversification Inter-firm Networks open-systems dynamics
Entrepreneurial Firms internal dynamics M. Best, NCA
14. Source: Steven Syre,Charles Stein, Boston Globe 10/14/1999
Family tree: data communication equipment
15. Figure 5.4. Electrical Engineering Graduates in
Massachusetts Source : New England Board of Higher Education M.
Best, NCA
16. Figure 4. Republic of Ireland Engineering Graduates Source:
National Council for Educational Awards, Republic of Ireland M.
Best, NCA
17. Figure 5. Growth in Engineering and Science Graduates
1975-1995 M. Best, NCA Ireland Singapore S. Korea Taiwan 706 702
10266 6700 NA NA 0 1200 5456 2965 47277 15170 NA NA 12351 2818
M&CS NS&E NS&E M&CS 1975 1995
18. Source: Mission Critical: Closing the Achievement Gap Conf
. , Joint Venture: Silicon Valley Network Changing Economy Makes
Education More Important
19. Design capabilities and skills integration Source: Penang
Design Center
20. Knowledge Workers in Massachusetts Compared With the United
States Source: R. Forrant, P. Moss and C. Tilly, Knowledge Sector
Powerhouse, UML 2001. ** Statistically significant at the 5%
level.
21. Regional Growth and Skill Formation Dynamics
22. Figure 2. Two Models of Innovation 1. Science Push
Innovation: U.S. Big Business BR DR AR Product Knowledge Domain:
Science Technology Design Engineering Engineering Detail } BR =
Basic Research; AR = Applied Research; DR = Dev. Research Source:
Adapted from David Meth; Engineered in Japan . Oxford University
Press 1995 PC = Product Concept; TR = Technological Research (New
Technological Knowledge) 2. Incremental Innovation: Japan DR AR TR
Product Development PC 1 PC 2 PC 3 Technology Applied Technology:
Generic + Proprietary M. Best, NCA
23. Figure 4.3. Systems Integration Innovation Product
Development Technology New Technology SI = Systems Integration
Enabled by information technology Hardware + software Discipline
integration PC 1 SI TR 1 PC 2 PC 3 PC 4 TR 2 BR Science M. Best,
NCA
24. Biodegradable Polymer Research Center* University of
Massachusetts Lowell Companies Cargill 3M Monsanto Eastman Chemical
Convatee Morflex Dow BASF BF Goodrich National Starch EPA US Army
Natick Govt Agencies & Labs Regional Companies New Materials
Polymer Biodegradation Center* Scientific & Technical Expertise
Synthesis (chemistry) Biodegradability Testing (biology) Microscopy
Instrumentation (physics) Processing & Blending Techniques
(plastics eng) NSF Scientific Literature Patent Search Global
Competitor Analysis Research Projects Processing & Blending
Environmental Testing Graduate Students Japanese Companies
Mitsubishi Taizel Mitsui Topan Ajinomoto Damippon Kirin Nippongos
Shimatsu Unitika Japanese Companies Tsukuba MITI * A National
Science Foundation Industry / University Cooperative Research
Center since 1993
25. Atomic Figure 5.2. The Law of Diminishing Sizes Critical
Size Dimension (Meters) M. Best, NCA Technological Periods
Mechanical Electrical Megahertz to Terahertz/sec (Measure of flow)
Electronic Armory 1817 Robbins & Lawrence 1000 th s Vernier
Caliper 1851 Micrometer 1867 Brown & Sharpe Central Power
Station 1890 Edison/ Ford Moores Law Photonics 10 -12 bits/sec
Genome 1/10 atom D 1st Prerequisite to mass production 2nd
Prerequisite to mass production Transition to nanotechnology +
self-assembly Nanotechnology Photonics Biotech 1800 2000 1850 1860s
1890 1950 10 -6 10 -4 10 -3 10 -12 10 -9 Nano
26. Policy Proposals Linked to the Capability Triad
27. Policy Proposals (PPs)
PP1 Concentrate on entrepreneurial firms.
PP2 Foster open networks.
PP3 Apply principle of system integration.
PP4 Diffuse high performance work organisations.
PP5 Develop and diffuse technology management
capabilities.
PP6 Partner with inward investment to advance
capabilities.
PP7 Integrate technology management and skill formation.
PP8 Integrate mission-driven diffusion agencies with industrial
policy goals.
PP9 Link visible and invisible colleges.
PP10 Administer the research, technology development and
innovation infrastructure.
29. ITRI Technology Output Source: Industrial Technology
Research Institute, Taiwan * Including conferences, seminars,
workshops, and technical training programs
